AN ACT to amend and reenact §5B-2E-3, §5B-2E-4, §5B-2E-5, §5B-2E-7,
§5B-2E-7a, §5B-2E-8 and §5B-2E-11 of the Code of West
Virginia, 1931, as amended, and to amend said code by adding
thereto a new section, designated §5B-2E-7b, all relating
generally to the West Virginia Tourism Development Act;
providing, modifying or eliminating certain definitions;
removing requirement for engagement of a consulting firm to
review proposed projects; imposing application filing fee;
providing additional criteria for evaluation of applications;
eliminating limitation on total amount of tourism development
expansion project tax credits for all approved companies each
calendar year; providing increased tax credit amounts for
projects located on or adjacent to state and federal
recreational property; establishing tax credit for qualified
professional services destination facilities under certain
circumstances; specifying benefits upon application and
review; providing certain limitations on benefits; authorizing
rulemaking by the Tax Commissioner; providing for recapture;
extending the deadline for project applications; and making
technical corrections.

Be it enacted by the Legislature of West Virginia:

That §5B-2E-3, §5B-2E-4, §5B-2E-5, §5B-2E-7, §5B-2E-7a, §5B-2E-8 and §5B-2E-11 of the Code of West Virginia, 1931, as amended,
be amended and reenacted, and that said code be amended by adding
thereto a new section, designated §5B-2E-7b, all to read as
follows:

ARTICLE 2E. WEST VIRGINIA TOURISM DEVELOPMENT ACT.

§5B-2E-3. Definitions.

As used in this article, unless the context clearly indicates
otherwise:

(1) "Agreement" means a tourism development agreement entered
into, pursuant to section six of this article, between the
development office and an approved company with respect to a
project.

(2) "Approved company" means any eligible company approved by
the development office pursuant to section five of this article
seeking to undertake a project.

(3) "Approved costs" means:

(a) Included costs:

(i) Obligations incurred for labor and to vendors,
contractors, subcontractors, builders, suppliers, delivery persons
and material persons in connection with the acquisition,
construction, equipping or installation of a project;

(ii) The costs of acquiring real property or rights in real
property and any costs incidental thereto;

(iii) The cost of contract bonds and of insurance of all kinds
that may be required or necessary during the course of the
acquisition, construction, equipping, or installation of a project
which is not paid by the vendor, supplier, delivery person,
contractor or otherwise provided;

(iv) All costs of architectural and engineering services,
including, but not limited to: Estimates, plans and specifications,
preliminary investigations and supervision of construction,
installation, as well as for the performance of all the duties
required by or consequent to the acquisition, construction,
equipping or installation of a project;

(v) All costs required to be paid under the terms of any
contract for the acquisition, construction, equipping or
installation of a project;

(vi) All costs required for the installation of utilities,
including, but not limited to: Water, sewer, sewer treatment, gas,
electricity, communications and off-site construction of utility
extensions to the boundaries of the real estate on which the
facilities are located, all of which are to be used to improve the
economic situation of the approved company in a manner that allows
the approved company to attract persons; and

(vii) All other costs comparable with those described in this
subdivision;

(b) Excluded costs. -- The term "approved costs" does not
include any portion of the cost required to be paid for the
acquisition, construction, equipping or installation of a project
that is financed with governmental incentives, grants or bonds or
for which the eligible taxpayer elects to qualify for other tax
credits, including, but not limited to, those provided by article
thirteen-q, chapter eleven of this code. The exclusion of certain
costs of a project under this paragraph (b) does not automatically
disqualify the remainder of the costs of the project.

(4) "Base tax revenue amount" means the average monthly amount
of consumer sales and service tax collected by an approved company,
based on the twelve-month period ending immediately prior to the
opening of a new tourism development project for business or a
tourism development expansion project, as certified by the State
Tax Commissioner.

(5) "Development office" means the West Virginia Development
Office as provided in article two of this chapter.

(6) "Crafts and products center" means a facility primarily
devoted to the display, promotion and sale of West Virginia
products and at which a minimum of eighty percent of the sales
occurring at the facility are of West Virginia arts, crafts or
agricultural products.

(7) "Eligible company" means any corporation, limited
liability company, partnership, limited liability partnership, sole
proprietorship, business trust, joint venture or any other entity
operating or intending to operate a project, whether owned or
leased, within the state that meets the standards required by the
development office. An eligible company may operate or intend to
operate directly or indirectly through a lessee.

(9) "Entertainment destination center" means a facility
containing a minimum of two hundred thousand square feet of
building space adjacent or complementary to an existing tourism
attraction, an approved project, or a major convention facility and
which provides a variety of entertainment and leisure options that
contain at least one major theme restaurant and at least three
additional entertainment venues, including, but not limited to,
live entertainment, multiplex theaters, large-format theaters,
motion simulators, family entertainment centers, concert halls,
virtual reality or other interactive games, museums, exhibitions or
other cultural and leisure time activities. Entertainment and food
and drink options shall occupy a minimum of sixty percent of total
gross area, as defined in the application, available for lease and
other retail stores shall occupy no more than forty percent of the
total gross area available for lease.

(10) "Final approval" means the action taken by the executive
director of the development office qualifying the eligible company
to receive the tax credits provided in this article.

(11) "Project" means a tourism development project and/or a
tourism development expansion project administered in accordance
with the provisions of this article.

(12) “Qualified professional services destination facility”
means a facility with a minimum qualified investment, as defined in
this article, of not less than $80 million physically located in
this state and adjacent or complementary to a historic resort
hotel, which primarily furnishes and provides personal or
professional services, or both types of services, to individuals
who primarily are residents of another state or foreign county.

(13) "State agency" means any state administrative body,
agency, department, division, board, commission or institution
exercising any function of the state that is not a municipal
corporation or political subdivision.

(14) “Tourism attraction” means a cultural or historical site,
a recreation or entertainment facility, an area of natural
phenomenon or scenic beauty, a West Virginia crafts and products
center, or an entertainment destination center or a qualified
professional services destination facility. A project or tourism
attraction does not include any of the following:

(A) Lodging facility, unless:

(i) The facility constitutes a portion of a project and
represents less than fifty percent of the total approved cost of
the project, or the facility is to be located on recreational
property owned or leased by the state or federal government and the
facility has received prior approval from the appropriate state or
federal agency;

(ii) The facility involves the restoration or rehabilitation
of a structure that is listed individually in the national register
of historic places or is located in a national register historic
district and certified by the state historic preservation officer
as contributing to the historic significance of the district and
the rehabilitation or restoration project has been approved in
advance by the state historic preservation officer; or

(iii) The facility involves the construction, reconstruction,
restoration, rehabilitation or upgrade of a full-service lodging
facility or the reconstruction, restoration, rehabilitation or
upgrade of an existing structure into a full-service lodging
facility having not less than five hundred guest rooms, with
construction, reconstruction, restoration, rehabilitation or
upgrade costs exceeding ten million dollars;

(B) A facility that is primarily devoted to the retail sale of
goods, other than an entertainment destination center, a West
Virginia crafts and products center or a project where the sale of
goods is a secondary and subordinate component of the project; and

(C) A recreational facility that does not serve as a likely
destination where individuals who are not residents of the state
would remain overnight in commercial lodging at or near the project
or existing attraction.

(15) "Tourism development project" means the acquisition,
including the acquisition of real estate by a leasehold interest
with a minimum term of ten years, construction and equipping of a
tourism attraction; the construction and installation of
improvements to facilities necessary or desirable for the
acquisition, construction, installation of a tourism attraction,
including, but not limited to, surveys, installation of utilities,
which may include water, sewer, sewage treatment, gas, electricity,
communications and similar facilities; and off-site construction of
utility extensions to the boundaries of the real estate on which
the facilities are located, all of which are to be used to improve
the economic situation of the approved company in a manner that
allows the approved company to attract persons, but does not
include a project that will be substantially owned, managed or
controlled by an eligible company with an existing project located
within a ten mile radius, or by a person or persons related by a
family relationship, including spouses, parents, children or
siblings, to an owner of an eligible company with an existing
project located within a ten mile radius.

(16) "Tourism development expansion project" means the
acquisition, including the acquisition of real estate by a
leasehold interest with a minimum term of ten years; the
construction and installation of improvements to facilities
necessary or desirable for the expansion of an existing tourism
attraction including, but not limited to, surveys, installation of
utilities, which may include water, sewer, sewage treatment, gas,
electricity, communications and similar facilities; and off-site
construction of utility extension to the boundaries of real estate
on which the facilities are located, all of which are to be used to
improve the economic situation of the approved company in a manner
that allows the approved company to attract persons.

(17) "Tourism development project tax credit" means the
tourism development project tax credit allowed by section seven of
this article.

The development office has the following powers and duties, in
addition to those set forth in this case, necessary to carry out
the purposes of this article including, but not limited to:

(1) Make approval of all applications for projects and enter
into agreements pertaining to projects with approved companies;

(2) Employ fiscal consultants, attorneys, appraisers and other
agents as the executive director of the development office finds
necessary or convenient for the preparation and administration of
agreements and documents necessary or incidental to any project;
and

(3) Impose and collect fees and charges in connection with any
transaction.

(4) Impose and collect from the applicant a non-refundable
application fee in the amount of $10,000 to be paid to the
Development Office when the application is filed.

(a) Each eligible company that seeks to qualify a project for
the tourism development project tax credit provided by section
seven of this article, or for the tourism development expansion
project tax credit provided by section seven-a of this article, as
applicable, must file a written application for approval of the
project with the Development Office.

(b) With respect to each eligible company making an
application to the Development Office for a tourism development
project tax credit or a tourism development expansion project tax
credit, the Development Office shall make inquiries and request
documentation, including a completed application, from the
applicant that shall include: A description and location of the
project; capital and other anticipated expenditures for the project
and the sources of funding therefor; the anticipated employment and
wages to be paid at the project; business plans that indicate the
average number of days in a year in which the project will be in
operation and open to the public; and the anticipated revenues and
expenses generated by the project.

(c) On and after the effective date of this section as amended
in 2014, the executive director of the Development Office, within
sixty days following receipt of an application or receipt of any
additional information requested by the Development Office
respecting the application, whichever is later, shall act to grant
or not to grant approval of the application, based on the following
criteria:

(1) The project will attract at least twenty-five percent of
its visitors from outside of this state;

(2) The project will have approved costs in excess of
$1,000,000;

(3) The project will have a significant and positive economic
impact on the state considering, among other factors, the extent to
which the project will compete directly with or complement existing
tourism attractions in the state and the amount by which increased
tax revenues from the project will exceed the credit given to the
approved company;

(4) The project will produce sufficient revenues and public
demand to be operating and open to the public for a minimum of one
hundred days per year;

(5) The project will provide additional employment
opportunities in the state;

(6) The quality of the proposed project and how it addresses
economic problems in the area in which the project will be located;

(7) Whether there is substantial and credible evidence that
the project is likely to be started and completed in a timely
fashion;

(8) Whether the project will, directly or indirectly, improve
the opportunities in the area where the project will be located for
the successful establishment or expansion of other industrial or
commercial businesses;

(9) Whether the project will, directly or indirectly, assist
in the creation of additional employment opportunities in the area
where the project will be located;

(10) Whether the project helps to diversify the local economy;

(11) Whether the project is consistent with the goals of this
article;

(12) Whether the project is economically and fiscally sound
using recognized business standards of finance and accounting; and

(13) The ability of the eligible company to carry out the
project.

(d) The Development Office may establish other criteria for
consideration when approving the applications.

(e) The decision by the executive director of the Development
Office is final.

(f)This section as amended and reenacted in 2014 shall apply
to applications under review by the director of the development
office prior to the effective date of this section as well as to
applications filed on and after the effective date of this section
as amended and reenacted in 2014.

(a) Approved companies are allowed a credit against the West
Virginia consumers sales and service tax imposed by article
fifteen, chapter eleven of this code and collected by the approved
company on sales generated by or arising from the operations of the
tourism development project: Provided, That if the consumers sales
and service tax collected by the approved company is not solely
attributable to sales resulting from the operation of the new
tourism development project, the credit shall only be applied
against that portion of the consumers sales and service tax
collected in excess of the base tax revenue amount. The amount of
this credit is determined and applied as provided in this article.

(b) The maximum amount of credit allowable in this article is
equal to twenty-five percent of the approved company's approved
costs as provided in the agreement: Provided, That, if the tourism
development project site is located within the permit area or an
adjacent area of a surface mining operation, as these terms are
defined in section three, article three, chapter twenty-two of this
code, from which all coal has been or will be extracted prior to
the commencement of the tourism development project, or the tourism
development project site is located on or adjacent to recreational
property owned or leased by the state or federal government and
when the project is located on property owned or leased by the
state or federal government, the project has received prior
approval from the appropriate state or federal agency, the maximum
amount of credit allowable is equal to thirty-five percent of the
approved company's approved costs as provided in the agreement.

(c) The amount of credit allowable must be taken over a ten-year period, at the rate of one tenth of the amount thereof per
taxable year, beginning with the taxable year in which the project
is opened to the public, unless the approved company elects to
delay the beginning of the ten-year period until the next
succeeding taxable year. This election shall be made in the first
consumers sales and service tax return filed by the approved
company following the date the project is opened to the public.
Once made, the election cannot be revoked.

(d) The amount determined under subsection (b) of this section
is allowed as a credit against the consumers sales and service tax
collected by the approved company on sales from the operation of
the tourism development project. The amount determined under said
subsection may be used as a credit against taxes required to be
remitted on the approved company's monthly consumers sales and
service tax returns that are filed pursuant to section sixteen,
article fifteen, chapter eleven of this code. The approved company
shall claim the credit by reducing the amount of consumers sales
and service tax required to be remitted with its monthly consumers
sales and service tax returns by the amount of its aggregate annual
credit allowance until such time as the full current year annual
credit allowance has been claimed. Once the total credit claimed
for the tax year equals the approved company's aggregate annual
credit allowance no further reductions to its monthly consumers
sales and service tax returns will be permitted.

(e) If any credit remains after application of subsection (d)
of this section, the amount of credit is carried forward to each
ensuing tax year until used or until the expiration of the third
taxable year subsequent to the end of the initial ten-year credit
application period. If any unused credit remains after the
thirteenth year, that amount is forfeited. No carryback to a prior
taxable year is allowed for the amount of any unused portion of any
annual credit allowance.

(a) Approved companies are allowed a credit against the West
Virginia consumers sales and service tax imposed by article
fifteen, chapter eleven of this code and collected by the approved
company on sales generated by or arising from the operations of the
tourism development expansion project: Provided, That the tourism
development expansion project tax credit allowed under this section
is separate and distinct from any credit allowed for a tourism
development project in accordance with the provisions of section
seven of this article: Provided, however, That if the consumers
sales and service tax collected by the approved company is not
solely attributable to sales resulting from the operation of the
tourism development expansion project, the credit shall only be
applied against that portion of the consumers sales and service tax
collected in excess of the base tax revenue amount. The amount of
this credit is determined and applied as provided in this article.

(b) The maximum amount of credit allowable in this article is
equal to twenty-five percent of the approved company's approved
costs as provided in the agreement: Provided, That, if the tourism
development expansion project site is located within the permit
area or an adjacent area of a surface mining operation, as these
terms are defined in section three, article three, chapter twenty-two of this code, from which all coal has been or will be extracted
prior to the commencement of the tourism development project, or
the tourism development project site is located on or adjacent to
recreational property owned or leased by the state or federal
government and when the project is located on property owned or
leased by the state or federal government, the project has received
prior approval from the appropriate state or federal agency, the
maximum amount of credit allowable is equal to thirty-five percent
of the approved company's approved costs as provided in the
agreement.

(c) The amount of credit allowable must be taken over a ten-year period, at the rate of one tenth of the amount thereof per
taxable year, beginning with the taxable year in which the project
is opened to the public, unless the approved company elects to
delay the beginning of the ten-year period until the next
succeeding taxable year. This election shall be made in the first
consumers sales and service tax return filed by the approved
company following the date the project is opened to the public.
Once made, the election cannot be revoked.

(d) The amount determined under subsection (b) of this section
is allowed as a credit against the consumers sales and service tax
collected by the approved company on sales from the operation of
the tourism development expansion project. The amount determined
under said subsection may be used as a credit against taxes
required to be remitted on the approved company's monthly consumers
sales and service tax returns that are filed pursuant to section
sixteen, article fifteen, chapter eleven of this code. The
approved company shall claim the credit by reducing the amount of
consumers sales and service tax required to be remitted with its
monthly consumers sales and service tax returns by the amount of
its aggregate annual credit allowance until such time as the full
current year annual credit allowance has been claimed. Once the
total credit claimed for the tax year equals the approved company's
aggregate annual credit allowance no further reductions to its
monthly consumers sales and service tax returns will be permitted.

(e) If any credit remains after application of subsection (d)
of this section, the amount of credit is carried forward to each
ensuing tax year until used or until the expiration of the third
taxable year subsequent to the end of the initial ten-year credit
application period. If any unused credit remains after the
thirteenth year, that amount is forfeited. No carryback to a prior
taxable year is allowed for the amount of any unused portion of any
annual credit allowance.

§5B-2E-7b. Credit against taxes.

(a) General. – When a qualified professional services
destination facility is located at or adjacent to an existing
historic resort hotel with at least five hundred rooms and the
qualified professional services destination facility eligible for
credit under this section is primarily engaged in furnishing
services that are not subject to the tax imposed by article
fifteen, chapter eleven of this code, then in lieu of the credits
that otherwise would be allowable under section seven or seven-a of
this article, the eligible company that complies with the
requirements of this section may claim the credit provided in this
section: Provided, That the maximum amount of credit allowable
under this section is equal to twenty-five percent of the eligible
company’s qualified investment, as defined in this section.

(b) Definitions. – The following words and phrases when used
in this section have the meanings given to them in this subsection
unless the context in which used clearly indicates that a different
meaning was intended by the Legislature.

(1) "Agreement" means an agreement entered into under
subsection (g) of this section.

(2) "Compensation" means wages, salaries, commissions and any
other form of remuneration paid to employees for personal services.

(3) "Cost-of-living adjustment" for any calendar year is the
percentage, if any, by which the consumer price index for the
preceding calendar year exceeds the consumer price index for the
calendar year 2015.

(4) "Consumer price index" for any calendar year means the
average of the federal consumer price index as of the close of the
twelve-month period ending on August 31 of that calendar year.

(5) "Eligible company" for purposes of this section means any
corporation, limited liability company, partnership, limited
liability partnership, sole proprietorship, business trust, joint
venture or any other entity operating a qualified professional
services destination facility, whether owned or leased, within the
state that: (A) creates at least one hundred twenty-five new jobs
in this state within thirty-six months after the date the qualified
investment is placed into service or use, and maintains those jobs
for the entire ten year life of the tax credit specified in this
section, (B) makes available to its full-time employees health
insurance coverage and pays at least fifty percent of the premium
for the health insurance, (C) generates, within thirty-six months
after the date the qualified investment is placed into service or
use, not less than $10 million of gross receipts upon which the
taxes imposed under article twenty-seven, chapter eleven of this
code are paid, and (D) meets the standards, limitations and
requirements of this section and of the development office. An
eligible company may operate or intend to operate directly or
indirectly through a lessee or a contract operator.

(6) "Federal consumer price index" means the most recent
consumer price index as of August 31 each year for all urban
consumers published by the United States Department of Labor.

(7) "Health insurance benefits" means employer-provided
coverage for medical expenses of the employee or the employee and
his or her family under a group accident or health plan, or
employer contributions to an Archer medical savings account, as
defined in Section 220 of the Internal Revenue Code of 1986, as
amended, or to a health savings account, as defined in Section 223
of the Internal Revenue Code, of the employee when the employer's
contribution to any such account is not less than fifty percent of
the maximum amount permitted for the year as employer-provided
coverage under Section 220 or 223 of the Internal Revenue Code,
whichever section is applicable.

(8) "Historic resort hotel" means a resort hotel registered
with the United States Department of the Interior on the effective
date of this amendment as a national historic landmark in its
National Registry of Historic Places having not fewer than five
hundred guest rooms.

(9) "New employee" means a person residing and domiciled in
this state hired by the taxpayer to fill a position or a job in
this state which previously did not exist in the taxpayer's
business enterprise in this state prior to the date the application
was filed under subsection (c) of this section. In no event may the
number of new employees exceed the total net increase in the
employer's employment in this state: Provided, That the Tax
Commissioner may require that the net increase in the taxpayer's
employment in this state be determined and certified for the
taxpayer's controlled group as defined in article twenty-four of
this chapter. In addition, a person is a "new employee" only if the
person's duties are on a regular, full-time and permanent basis:

(A) "Full-time employment" means employment for at least
eighty hours per month at a wage not less than the amount specified
in subdivision (1), subsection (d) of this section; and

(B) "Permanent employment" does not include employment that is
temporary or seasonal and therefore the wages, salaries and other
compensation paid to the temporary or seasonal employees will not
be considered for purposes of this section even if the compensation
paid to the temporary or seasonal employee equals or exceeds the
amount specified in paragraph (A) of this subdivision.

(10) "New job" means a job which did not exist in the business
of the taxpayer in this state prior to filing the application for
benefits under this section, and which is filled by a new employee.

(11) "Professional services" means only those services
provided directly by: a physician licensed to practice in this
State, a surgeon licensed to practice in this State, a dentist
licensed to practice in this State, a podiatrist licensed to
practice in this State, an osteopathic physician licensed to
practice in this State, a psychologist licensed to practice in this
State, an optometrist licensed to practice in this State, a
registered nurse licensed to practice in this State, a physician
assistant licensed to practice in this State, a licensed practical
nurse licensed to practice in this State, a dental hygienist
licensed to practice in this State, a social worker licensed to
practice in this State, or any other health care professional
licensed to practice in this State;

(12) “Qualified investment” means one-hundred percent of the
cost of property purchased or leased for the construction and
equipping of a qualified professional services destination facility
which is placed in service or use in this State by an eligible
company.

(A) The cost of property purchased for a qualified
professional services destination facility is determined under the
following rules:

(i) Cost does not include the value of property given in trade
or exchange for the property purchased for business expansion.

(ii) If property is damaged or destroyed by fire, flood, storm
or other casualty, or is stolen, then the cost of replacement
property does not include any insurance proceeds received in
compensation for the loss.

(iii) The cost of real property acquired by written lease for
a primary term of ten years or longer is one hundred percent of the
rent reserved for the primary term of the lease, not to exceed ten
years.

(iv) The cost of tangible personal property acquired by
written lease for a primary term of not less than four years.

(v) In the case of self-constructed property, the cost thereof
is the amount properly charged to the capital account for
depreciation in accordance with federal income tax law.

(vi) The cost of property used by the taxpayer out-of-state
and then brought into this State, is determined based on the
remaining useful life of the property at the time it is placed in
service or use in this State, and the cost is the original cost of
the property to the taxpayer less straight line depreciation
allowable for the tax years or portions thereof the taxpayer used
the property outside this State. In the case of leased tangible
personal property, cost is based on the period remaining in the
primary term of the lease after the property is brought into this
State for use in a new or expanded business facility of the
taxpayer, and is the rent reserved for the remaining period of the
primary term of the lease, not to exceed ten years, or the
remaining useful life of the property, determined as aforesaid,
whichever is less.

(c) Credit against taxes. – The credit allowed by this section
shall be equal to twenty-five percent of the eligible company's
qualified investment in the qualified professional services
destination facility and shall be taken and applied as provided in
this subsection (c). Notwithstanding any other provision of this
article to the contrary, no taxpayer or group of taxpayers may gain
entitlement to more than $37.5 million total aggregate tax credit
under this section and no taxpayer, or group of taxpayers, in the
aggregate may apply more than $2.5 million of annual credit in any
tax year under this section, either in the form of a refund or
directly against a tax liability or in any combination thereof.
This limitation applies to initial tax credit attributable to
qualified investment in a qualified professional services
destination facility, and to qualified investment in a follow-up
project expansion, so that credit attributable additively and in
the aggregate to both may not be applied to exceed $2.5 million
annual credit in any tax year.

(1) Application of credit. – The amount of credit allowable
under this subsection shall be taken over a ten-year period, at the
rate of one tenth of the amount thereof per taxable year, beginning
with the taxable year in which the eligible company places the
qualified professional services destination facility, or part
thereof, in service or use in this state, unless the eligible
company elected to delay the beginning of the ten-year period until
the next succeeding taxable year. This election shall be made in
the annual income tax return filed under chapter eleven of this
code for the taxable year in which the qualified professional
services destination facility is first placed into service or use
by the taxpayer. Once made, the election may not be revoked. The
annual credit allowance is taken in the manner prescribed in
subdivision (3) of this subsection (c): Provided, That if any
credit remains after the initial ten year credit application
period, the amount of remaining credit is carried forward to each
ensuing tax year until used or until the expiration of the fifth
taxable year subsequent to the end of the initial ten year credit
application period. If any unused credit remains after expiration
of the fifth taxable year subsequent to the end of the initial ten
year credit application period, the amount thereof is forfeited. No
carryback to a prior taxable year is allowed for the amount of any
unused portion of any annual credit allowance.

(2) Placed in service or use. – For purposes of the credit
allowed by this subsection (c), qualified investment or qualified
investment property is considered placed in service or use in the
earlier of the following taxable years:

(A) The taxable year in which, under the eligible company’s
depreciation practice, the period for depreciation with respect to
the property begins; or

(B) The taxable year in which the property is placed in a
condition or state of readiness and availability for a specifically
assigned function.

(3) Application of annual credit allowance.

(A) In general.- The aggregate annual credit allowance for the
current taxable year is an amount equal to the one-tenth part
allowed under subdivision (1) of this subsection for qualified
investment placed into service or use.

(B) Application of current year annual credit allowance. – The
amount determined under this subsection (c) is allowed as a credit
against one hundred percent of the eligible company’s state tax
liabilities applied as provided in paragraphs (C) and (D) of this
subdivision (3), and in that order:

(C) Corporation net income taxes. - The amount of allowable
tax credit for the year determined under paragraph (A) of this
subdivision (3) shall first be applied to reduce the taxes imposed
by article twenty-four, chapter eleven of this code, for the
taxable year determined before application of allowable credits
against tax.

(D) Personal income taxes. –

(i) If the eligible company is an electing small business
corporation, as defined in section 1361 of the United States
Internal Revenue Code of 1986, as amended, a partnership, a limited
liability company that is treated as a partnership for federal
income tax purposes or a sole proprietorship, then any unused
credit after application of paragraph (C) of this subdivision (3)
is allowed as a credit against the taxes imposed by article twenty-one, chapter eleven of this code on the members, owners, partners
or interest holders in the eligible company.

(ii) Electing small business corporations, limited liability
companies, partnerships and other unincorporated organizations
shall allocate the credit allowed by this article among their
members in the same manner as profits and losses are allocated for
the taxable year.

(E) No credit is allowed under this subdivision (3) against
any employer withholding taxes imposed by article twenty-one,
chapter eleven of this code.

(F) The tax credits allowed under articles thirteen-j,
thirteen-q, thirteen-s, thirteen-r, thirteen-w, and thirteen-aa of
this code may not be applied to offset any tax against which the
tax credit allowed under this article is allowed or authorized. No
person, entity, company, or eligible company authorized or entitled
to any tax credit allowed under this section or any member of the
unitary group or any member of the controlled group of which the
taxpayer is a member, may gain entitlement to any other economic
development tax credit or economic development tax incentive which
relates to the investment or activity upon which the credit
authorized under this section is based.

(G) (i) In order to effectuate the purposes of this
subdivision (3), the Tax Commissioner may propose for promulgation
rules, including emergency rules, in accordance with article three,
chapter twenty-nine-a of this code.

(ii) The Tax Commissioner may apply any amount of the tax
credit otherwise available to a Taxpayer under this article, to pay
any delinquent West Virginia state tax liability of the taxpayer,
and interest and penalties as applicable.

(iii) Any amount of the tax credit otherwise available to a
taxpayer under this article may be applied by the applicable
administering agency to pay any outstanding obligation to a
Workers' Compensation Fund, as defined in article two-c of chapter
twenty-three of this code, or any outstanding obligation under the
West Virginia Unemployment Compensation Act.

(iv) Any amount of the tax credit otherwise available to a
taxpayer under this article, may be applied by the applicable
administering agency to pay any delinquent or unpaid assessment,
fee, fine, civil penalty or monetary imposition imposed by the West
Virginia Division of Environmental Protection or the United States
Environmental Protection Agency, or any agency charged with
enforcing federal, state or local environmental or hazardous waste
regulations.

(H) Unused credit, refundable credit. – If any annual credit
remains after application of preceding paragraphs of this
subdivision (3), the amount thereof shall be refunded annually to
the eligible company, and distributed in accordance with the credit
distribution specified in this subdivision (3): Provided, That the
amount thereof may not exceed the limitation on annual tax credit
or the limitation on total aggregate tax credit specified in this
section.

(I) Forfeiture of credit. - If any credit remains after
expiration of the fifth taxable year subsequent to the end of the
initial ten year credit application period, such credit is
forfeited, and may not be used to offset any West Virginia tax
liability.

(d) Compensation of employees filling new jobs.

(1) The new jobs and new employee criteria which count toward
qualification of a taxpayer as an eligible company for purposes of
the tax credit allowed by this section shall be subject to the
following limitations and requirements. A job counts toward
qualification of a taxpayer as an eligible company if the job is a
new job, as defined in this section, held by a new employee, as
defined in this section, and the new job:

(A) Pays a median wage of at least $37,000 annually. Beginning
January 1, 2015, and on January 1 of each year thereafter, the Tax
Commissioner shall prescribe an amount that shall apply in lieu of
the $37,000 amount for new jobs filled during that calendar year.
This amount is prescribed by increasing the $37,000 figure by the
cost-of-living adjustment for that calendar year. If any increase
under this subdivision is not a multiple of $50, the increase shall
be rounded to the next lowest multiple of $50;

(B) Provides health insurance. The employer may, in addition,
offer benefits including child care, retirement and other benefits;
and

(C) Is a full-time, permanent position, as those terms are
defined in this section.

(D) Jobs that pay less than the statewide average nonfarm
payroll wage, as determined annually by the West Virginia Bureau of
Employment Programs, or that pay that salary, but do not also
provide health benefits in addition to the salary, do not count
toward qualification of a taxpayer as an eligible company under
this section. Jobs that are less than full-time, permanent
positions do not count toward qualification of a taxpayer as an
eligible company under this section.

(E) The employer having obtained qualification as an eligible
company under this section for the year in which the new job is
filled is not required to raise wages of the employees currently
employed in the new jobs upon which the initial qualification as an
eligible company under this section was based by reason of the
cost-of-living adjustment for new jobs filled in subsequent years
provided the employer continues to provide healthcare.

(e) Application and review.

(1) Application. - An eligible company that meets the
requirements of this section may apply to the Development Office
for entitlement to the tax credit authorized under this section.
The application shall be on a form prescribed by the Development
Office and shall include all of the following:

(A) The name and address of the applicant;

(B) Documentation that the applicant is a eligible company;

(C) Documentation that the applicant meets the requirements of
this section;

(D) Documentation that the applicant does not owe any
delinquent taxes or any other amounts to the federal government,
this state or any political subdivision of this state;

(E) An affidavit that the applicant has not filed for or
publicly announced its intention to file for bankruptcy protection
and that the company will not seek bankruptcy protection within the
next six calendar months following the date of the application;

(F) A waiver of confidentiality under section five-d, article
ten, chapter eleven of this code for information provided in the
application; and

(G) Any other information required by the Development Office.

(f) Credit allowable.

(1) Certified multiple year projects.

(A) In general. - A multiple year qualified professional
services destination facility project certified by the West
Virginia Development Office is eligible for the credit allowable by
this article. A project eligible for certification under this
section is one where the qualified investment under this article
creates at least the required minimum number of new jobs but the
qualified investment is placed in service or use over a period of
up to three successive tax years: Provided, That the qualified
investment is made pursuant to a written business facility
development plan of the taxpayer providing for an integrated
project for investment at one or more new or expanded business
facilities, a copy of which must be attached to the taxpayer's
application for project certification and approved by the West
Virginia Development Office, and the qualified investment placed in
service or use during the first tax year would not have been made
without the expectation of making the qualified investment placed
in service or use during the next two succeeding tax years.

(B) Application for certification. - The application for
certification of a project under this section shall be filed with
and approved by the West Virginia Development Office prior to any
credit being claimed or allowed for the project's qualified
investment and new jobs created as a direct result of the qualified
investment. This application shall be approved in writing and
contain the information as the West Virginia Development Office may
require to determine whether the project should be certified as
eligible for credit under this article.

(C) Review. - Within thirty days of receipt of a complete
application, the Development Office, in conjunction with the Tax
Division of the Department of Revenue, shall review the application
and determine if the applicant is an eligible company and that the
requirements of this section have been met. Applications not
approved within the thirty days specified in this subdivision are
hereby deemed denied.

(D) Approval. - The Development Office may approve or deny the
application. Upon approval of an application, the Development
Office shall notify the applicant in writing and enter into an
agreement with the eligible company for benefits under this
section.

(2) Certified follow-up project expansions.

(A) An eligible company that intends to undertake a follow-up
project expansion, may apply to the West Virginia Development
Office for certification of a single, one-time, follow-up project
expansion, and entitlement to an additional tax credit under this
section in an amount which is the lesser of twenty-five percent of
qualified investment in the follow-up project expansion or $12.5
million. No taxpayer, or group of taxpayers, in the aggregate may
apply more than $2.5 million of annual credit in any tax year under
this section, either in the form of a refund or directly against a
tax liability or in any combination thereof. This limitation
applies to initial tax credit attributable to qualified investment
in a qualified professional services destination facility, and to
qualified investment in a follow-up project expansion, so that
credit attributable additively and in the aggregate to both may not
be applied to exceed $2.5 million annual credit in any tax year.

(B) The requirements, limitations and qualifications
applicable to qualified professional services destination facility
projects under this section apply to follow-up project expansions,
except for those requirements, limitations and qualifications
expressly specified in this subdivision (2).

(C) Requirements for certification of a follow-up project
expansion are as follows:

(i) The eligible company, pursuant to certification and
authorization for entitlement to tax credit under subsection (1) of
this section (f), has placed qualified investment of not less than
$80 million into service in a qualified professional services
destination facility within an initial period of not more than
three tax years;

(ii) The eligible company intends to place additional
qualified investment in service or use in the previously certified
qualified professional services destination facility project, or an
expansion or extension thereof. In no case shall a follow-up
project expansion be certified if the follow-up project expansion
property is not contiguous to, or within not more than one mile of,
the initial qualified professional services destination facility;

(iii) The eligible company proposes to place the qualified
investment in the follow-up project expansion in service or use in
the fourth tax year subsequent to the tax year in which qualified
investment was first placed into service or use in the initial
qualified professional services destination facility project, or
under a multiple year project certification, in the fourth, fifth
and sixth tax year subsequent to the tax year in which qualified
investment was first placed into service or use in the initial
qualified professional services destination facility project;

(iv) The follow-up project expansion must create and maintain
at least twenty-five net new jobs held by new employees, in
addition to the new jobs created by the initial qualified
professional services destination facility project. The loss of any
West Virginia job at the eligible company will be subtracted from
the count of new jobs attributable to the follow-up project
expansion;

(v) The West Virginia Development Office shall not issue more
than one certification for any follow-up project expansion; and

(vi) The West Virginia Development Office shall not issue
certification of a follow-up project expansion unless the applicant
provides convincing evidence to show that the follow-up project
expansion will result in jobs creation specified in this
subdivision, that such jobs will remain and be maintained in West
Virginia for at least ten years subsequent to the placement of
qualified investment into service or use in the follow-up project
expansion, that the follow-up project expansion will not operate to
the detriment of other West Virginia businesses or to the detriment
of the economy, public welfare or moral character of West Virginia
or its people.

(g) Agreement.

(1) The agreement between the eligible company and the
Development Office shall be entered into before any benefits may be
provided under this section.

(2) The agreement shall do all of the following:

(A) Specify the terms and conditions the eligible company must
comply with in order to receive benefits under this section, other
than those terms, limitations and conditions specified and mandated
by statute or regulation; and

(B) Require the Development Office to certify all of the
following to the Tax Division of the Department of Revenue each
taxable year an agreement under this section is in effect:

(i) That the eligible company is eligible to receive benefits
under this section;

(ii) The number of new jobs created by the company during each
taxable year;

(iii) The amount of gross wages, as determined for purposes of
Form W2, as filed with the Internal Revenue Service, being paid to
each individual employed in a new job;

(iv) The amount of an eligible company’s qualified investment;

(v) The maximum amount of credit allowable to the eligible
company under this section; and

(vi) Any other information deemed necessary by the Development
Office.

(h) Filingand contents.

(1) Filing. – On or before the due date of the income tax
return for each tax year in which the agreement is in effect, an
eligible company shall file with the Tax Division of the Department
of Revenue a form prescribed by the Tax Commissioner.

(2) Contents. - The form specified under subdivision (1) of
this subsection (h) shall request the following information:

(A) The name and Employer Identification Number of the
eligible company;

(B) The effective date of the agreement;

(C) The reporting period end date;

(D) Information relating to each individual employed in a new
job as required by the Tax Commissioner;

(E) Aggregate gross receipts for the tax period and gross
receipts on which tax has been paid under article twenty-seven,
chapter eleven of this code for the tax period; and

(F) Any other information required by the Tax Commissioner.

(3) Taking of credit. - The taxpayer, participant or
participants claiming the credit for qualified investments in a
certified project shall annually file with their income tax returns
filed under chapter eleven of this code:

(A) Certification that the taxpayer’s or participant's
qualified investment property continues to be used in the project
and if disposed of during the tax year, was not disposed of prior
to expiration of its useful life;

(B) Certification that the new jobs created by the project's
qualified investment continue to exist and are filled by persons
who are residents of this State; and

(C) Any other information the tax commissioner requires to
determine continuing eligibility to claim the annual credit
allowance for the project's qualified investment.

(4) Confidentiality.- The contents of the completed form shall
be subject to the confidentiality rules set forth in section five-d, article ten, chapter eleven of this code: Provided, That
notwithstanding the provisions of section five-d, article ten,
chapter eleven of this code, or any other provision of this code,
tax returns, tax return information and such other information as
may be necessary to administer the tax credits and programs
authorized and specified by this article and in this section may be
exchanged between the Tax Commissioner and the West Virginia
Development Office without restriction.

(a) The approved company or eligible company shall forfeit the
tourism development project tax credit allowed by section seven of
this article, or the tourism development expansion tax credit
allowed by section seven-a of this article, or the tax credit
allowed by section seven-b of this article, as applicable, with
respect to any calendar year and shall pay the recapture tax
imposed by subsection (b) of this section, if:

(1) In any year following the first calendar year the project
is open to the public, the project fails to attract at least
twenty-five percent of its visitors from among persons who are not
residents of the state;

(2) In any year following the first year the project is open
to the public, the project is not operating and open to the public
for at least one hundred days; or

(3) The approved company or eligible company, as of the
beginning of each calendar year, has an outstanding obligation
under the West Virginia state tax and revenue laws; or

(4) Any company, approved company or eligible company, to
which entitlement to the tax credit authorized under section seven-b of this article has been previously established, fails to meet
the requirements specified in section seven-b for an eligible
company and for a qualified professional services destination
facility, including, but not limited to, jobs maintenance, employee
wage and employee health benefits, aggregate gross receipts, and
gross receipts subject to the tax imposed under article twenty-seven, chapter eleven of this code.

(5) Any company, approved company or eligible company, to
which entitlement to the tax credit authorized under section seven-b of this article has been previously established:

(A) Is delinquent in payment of any assessment, fee, fine,
civil penalty or monetary imposition imposed by the West Virginia
Division of Environmental Protection or the United States
Environmental Protection Agency, or any agency charged with
enforcing federal, state or local environmental or hazardous waste
regulations,

(B) Is delinquent in compliance with any order, injunction,
compliance agreement, agreed order, court order, mandamus or other
enforcement or compliance instrumentality of the West Virginia
Division of Environmental Protection or United States Environmental
Protection Agency or any agency charged with enforcing federal,
state or local environmental or hazardous waste regulations.

(C) Is out of compliance or not compliant with any citation or
order issued by the West Virginia Division of Environmental
Protection or the United States Environmental Protection Agency, or
any agency charged with enforcing federal, state or local
environmental or hazardous waste regulations, requiring that a
condition be abated or corrected.

(b) In addition to the loss of credit allowed under this
article for the calendar year, a credit recapture tax is hereby
imposed on any approved company or successor eligible company that
forfeits the tourism development project tax credit or the tourism
development expansion project credit or the credit authorized under
section seven-b of this article, under the provisions of subsection
(a) of this section. The credit recapture tax shall apply and the
approved company, and successor eligible companies, and any other
person or entity that has received the tax credit allowed under
this article shall be liable for an amount of recapture tax equal
to all previously claimed tourism development project tax credit or
tourism development expansion project credit, or the tax credits
authorized under section seven-b of this article, and allowed by
this article, as applicable, plus interest and penalties applicable
in accordance with the Tax Procedure and Administration Act. The
recapture tax shall be calculated and paid pursuant to the filing,
with the tax commissioner of an amended return, and such other
forms, schedules and documents as the Tax Commissioner may require,
for the prior calendar year, or calendar years, for which credit
recapture is required, along with interest, as provided in section
seventeen, article ten, chapter eleven of this code: Provided, That
the approved company, eligible company, person or entity who
previously claimed the tourism development project tax credit, or
the tourism development expansion project credit, or the tax
credits allowed by section seven-b of this article, as applicable,
under this article and successor eligible companies, persons or
entities are jointly and severally liable for payment of any
recapture tax subsequently imposed under this section. For purposes
of this recapture tax, the statute of limitations otherwise
applicable under the Tax Procedure and Administration Act shall not
begin to run until the eighteenth year subsequent to the earlier
of: the year when qualified investment is first placed into service
or use, or the year when the application for the tax credit
authorized under this article was filed with the West Virginia
Development Office.

(c) Within forty-five days after the end of each calendar year
during the term of the agreement, the approved company shall supply
the development office with all reports and certifications the
development office requires demonstrating to the satisfaction of
the development office that the approved company is in compliance
with applicable provisions of law. Based upon a review of these
materials and other documents that are available, the development
office shall then certify to the Tax Commissioner that the approved
company is in compliance with this section.

(d) The tax credit allowed in this article is transferable,
subject to the written consent of the development office, to an
eligible successor company that continues to operate the approved
project.

§5B-2E-11. Termination.

The Development Office may not accept any new project
application after December 31, 2019, and all applications submitted
prior to January 1, 2020, that have not been previously approved or
not approved, shall be deemed not approved and shall be null and
void as of January 1, 2020.